The Crossy company needs money to increase production. Participants in the “Bank of Solutions” believe that instead of searching for an investor, it is worth using leasing, factoring and other financing schemes.

Text: Ekaterina Sirina

The Russian company Crossy is engaged in the conversion of light commercial vehicles (LCVs) into refrigerators and insulated vans. Global automobile concerns, as a rule, supply “naked” vans; on their basis, local manufacturers equip the vehicles for a specific task, taking into account the requirements accepted in the country. Minibus taxis, ambulances or refrigerators are made on the basis of LCVs; each segment of the “conversion” has its own players.

Crossy employs 62 people. Revenue in 2012 amounted to 55 million rubles, in 2013 the owners plan to earn about 85 million rubles. The company specializes in the production of refrigerators based on all-metal vans and is a leader in this segment. Crossy's customers are retail chains and their suppliers. This year, the company received the International Manufacturer Identification Code (WMI) and can now equip vehicles to order from importers, producing refrigerators under the Crossy brand based on Peugeot, Citroen, Renault and Fiat vehicles. The company is already fulfilling the first centralized order from Peugeot Citroen Rus, and contracts with other automakers are in the process of being signed. Direct contracts open up new opportunities for the company. "Crossie" receives the car directly from customs, re-equips it and, with a new vehicle passport (PTS) and a new VIN number, transfers the finished car to the automaker's representative office. He sells refrigerators through his dealers throughout Russia.

The company equips 50 to 100 vehicles per month. However, the commercial director and co-owner of Crossy, Alexey Tulupov, fears that if importers actively order cars, the existing capacity may not be enough. “If we cannot satisfy the demands of importers, they will find other suppliers,” he says. To increase production volumes, you need to purchase new machines. The company invests all its profits in development, but there is a danger of losing time and the advantages of a segment leader. Now the company is developing with its own money, the loan burden does not exceed 4 million rubles. The top manager estimates the size of the required investments at approximately 70 million rubles.

In such a situation, is it worth relying on your own strength or is it better not to risk losing momentum and find an investor? Alexey Tulupov turned to the readers of the Federation Council and members of the Professionals.ru business network for advice.

Author of the problem

Alexey Tulupov, commercial director of the Crossy company

— Thanks to all the authors who sent solutions, I did not expect such a large number of responses. I was pleasantly surprised: our market is narrow and specific, but some participants showed high competence. I am grateful to Evgeny Antipanov for his qualified examination of market segments. I paid a lot of attention to the answers of Alexey Bulatov, Alexander Zhamanakov, Pavel Kovsharov: they consider pessimistic forecasts for market development.

Many authors advise first to improve the efficiency of the enterprise. Konstantin Borisov (his solution is one of the best) formulates KPIs, they allow us to see our shortcomings. Vitaly Makarchuk, Anna Goncharova, and Rustem Latypov also propose introducing a shift work schedule. Now we work in two shifts.

It is pleasant to note that the steps we took after the publication of the material in the Federation Council coincide with the recommendations given by the participants in the “Bank of Solutions”. Many authors advise using equipment leasing, in particular Andrey Bobrov, Valery Svetlichny, Nikita Stasevich, Faina Kononova, Ekaterina Genis, Vladimir Stukalov, Mikhail Slobodchikov. Now we are finishing the installation of leasing equipment - this scheme really helps to solve some of the problems we face.

I don’t agree with the advice to transfer production to other regions, as many people say. Rent and salary costs are reduced, but logistics costs are rising, the problem of personnel becomes even more acute, controllability is decreasing, and as a result, product quality is falling. Body deliveries take place centrally in Moscow; it is more profitable for us to be closer to the importer.

Dmitry Rogulin writes about the importance of strategic choice of your segment - importers or end consumers. Like some other authors, he recalls the higher margins when fulfilling custom orders, especially non-standard ones. We have many direct clients, including large retail chains, and we cannot refuse them now. But our priority is the production of serial products for importers.

The key to long-term relationships with importers is satisfying requests not only for quantity, but also for the quality of machines, organizing warranty and service maintenance. Achieving quality indicators also requires investment. With a gross profit margin of 49%, the net profit margin is about 10% per month, all profit goes to development. Despite the advice of many authors to develop with our own money, we need additional funds, so we are not giving up the idea of attracting an investor.

Thanks for the tips on finding funding. Valentin Bogomolov writes about loans given by European banks to buyers of equipment from local manufacturers. The idea of corporatizing the company, voiced by some authors, is interesting.

Practitioner

Kirill Zvyagin, b2b department specialist at Peugeot Citroen Rus LLC

— I liked Vyacheslav Vaisblekh’s call not to be afraid of competitors. Before our eyes, Crossy has gone from enthusiasts to professionals; we looked closely at the company for a long time before starting to work with it. As Anatoly Ilyasov rightly notes, in the consumer’s mind the Peugeot and Crossy brands are merging, and this requires great trust. I think other automakers will approach the issue in the same way. For the same reason, I do not approve of the advice “to use outsourcing in case of lack of capacity.” We had experience when a partner working in another “remodeling” segment took such a step. The result was his financial losses associated with the liquidation of his marriage, as well as damage to his reputation.

The centralized order that Crossy carries out for us is the first experience of such interaction between an importer and a “bodybuilder” of refrigerated trucks in Russia. Evgeniy Antipanov believes that Crossy should make maximum use of the help of partners, and we are ready to provide our capabilities to make joint products sellable and the Crossy brand recognizable. We understand the difficulties of a cash gap that may arise for a partner. “Mirror relationships” with the customer and suppliers, as Vyacheslav Vaisblekh writes, are really important. All parties involved in the production of the final product - bodybuilders, refrigeration suppliers and Crossy - found a common solution.

At the same time, the participants’ advice to look for an investor or lender in us was surprising: we are not a financial organization. Our participation in the construction of the plant is also unfounded; refrigerators are too narrow a segment. In this case, each of the partners takes on their own risks, and it is important for us that Crossy understands this. For example, the partners went to considerable expense to purchase and equip cars for participation in a joint regional roadshow, and we appreciate that.

The problem posed by the company is related to how the market will develop. The segment of refrigerators based on LCVs with an all-metal body is growing, but as Alexey Timoshin notes, it is unstable. We are just feeling out the market by analyzing requests from dealers. “Crossies” know the segment much better, we can’t do it without their help. We should not neglect the warnings about possible pessimistic market developments expressed by some authors. But I think that Crossy still needs additional resources.

The first joint batch of refrigerators has already been “scheduled”; many orders for the vehicle have come from regional dealers. Like Vitaly Makarchuk, I believe that there is huge development potential in the regions, which can be satisfied with the help of our dealer network. A painful issue for the entire industry is warranty and service in the regions. But Crossy has the know-how to troubleshoot problems on site.

Consultant

Mikhail Lobanov, managing partner of the investment fund Target Ventures

— I am not an expert in automotive production, my assessments of solutions differed from those of my colleagues. I most highly appreciated the authors who, in the words of Sergei Shchetinin, looked at the business of the Crossy company “through the eyes of an investor” and gave reasonable answers to the question posed in the case: what funds should be used to develop the company. The best, in my opinion, is the solution of Andrei Bobrov, I was impressed by the answers of Vladimir Stukalov, Vyacheslav Vaisblech, Evgeny Antipanov, Valery Svetlichny, Dmitry Rogulin, Pavel Kovsharov and Konstantin Borisov.

I liked the answers containing competent calculations. From these, as well as from my own calculations, it follows that the company's net profit is not that great. But investors, as a rule, are interested in projects with high return potential. I don’t agree with the harsh assessment of investors who, according to Vyacheslav Vaisblekh, want to take over the business for themselves. But the desire to return the invested money with a good profit is natural. In the case of Crossy, the investor may be put off by the limited potential of the segment and the unpredictability of the market.

As Dmitry Rogulin rightly notes, investment money is the most expensive. I agree with the authors who advise companies to consider various credit schemes, primarily factoring, which Vyacheslav Vaisblekh, Valery Svetlichny, Ekaterina Komelkova, Anna Goncharova write about. The reputation of such a partner as the Peugeot company, notes Anatoly Ilyasov, will certainly help.

I also agree with those who write about increasing production efficiency. I support the recommendations to correctly distribute financial flows, trying to achieve advances from the importer and deferred payments from suppliers, increasing product output from the 1st quarter. m meter area. I agree with the advice to outsource the production of components whenever possible.

The tasks that "Crossie" sets for itself are not obvious upon deep analysis, I am glad that the authors saw this. Valentin Bogomolov and Pavel Kovsharov wonder whether the company should strive to obtain ownership of land and production space. Servicing a purchase loan will cost more than rental costs. Operations with land and real estate are a separate business, non-core for Crossy, and it takes time to build production in a new location. Andrey Bobrov reminds that with a high company share in the segment, serious further growth is usually difficult. As for corporatization, going public is an expensive process, acceptable only for large companies. Schemes for corporatization or attracting investors will require the creation of companies outside the territory of Russia: domestic legislation currently cannot fully guarantee the rights of shareholders and investors.

Winner

Vyacheslav Vaisblekh, director of the Delta production enterprise, St. Petersburg

1. You have to get out yourself, otherwise the company’s leaders will have to part with their own ambitions and love for their brainchild. Portfolio investors are only interested in money. An importer interested in the development of the company could become an investor, but then you could lose orders from other importers.

2. Abandon the “do everything yourself” business model. Production of metal products and sandwich panels, vacuum forming to be subcontracted. Finding good manufacturers is not easy, but it is possible. Study the experience of Western companies that reserve only sales, marketing, logistics, assembly and design.

3. Focus on improving and speeding up the assembly process. The buyer cares about quality, speed and service, and he knows exactly how much a day of machine downtime costs. Study the lean manufacturing experience of Toyota and other manufacturers.

4. Make “mirror conditions” for suppliers and seek maximum deferment of payments from them. Your strength lies in the availability of certificates, licenses and contracts with global automakers. Use factoring.

5. Do not be afraid of competitors and remember your advantages.

Best solutions

Place 1

Score 23

Author Vyacheslav Vaisblekh

Company Manufacturing Enterprise "Delta"

Position Director

City of Saint Petersburg

Place 2

Score 22

Author Konstantin Borisov

LLC "Lubavitch" company

Position Technologist

City of Saint Petersburg

Place 3

Point 20

Author Andrey Bobrov

Company MD Consulting Group

Position Managing Partner

Moscow city

Place 4

Score 19

Author Valentin Bogomolov

Company Siberian State Aerospace University

Position Senior Lecturer, Department of Management

Krasnoyarsk city

Place 5

Score 18

Author Anna Goncharova

Company LLC "Byzantium"

Position Head of Purchasing Department

City of Murmansk

Worst decision

Increase the salaries of employees by raising the salary fund by 700 thousand rubles. The workers should appreciate such a gesture and, in turn, lend the company 70 million rubles. Each person receives $30-40 thousand—this is realistic for Moscow. The enterprise must provide a form of loan or become a joint stock company.

Word to print

A description of the new problem can be found on our website in the "Solution Bank" section. You can send your solutions to the editorial office by filling out the form on the website, or by mail ( sf-idea@kommersant.ru ) before November 16, 2013 . Please indicate your first and last name, place of residence, company where you work, and position. "Secret of the Firm" will announce the best solutions selected by an independent jury on December 3, 2013, and then we will announce the winner of the competition.

How business decisions were evaluated

The jury members select several of their favorite solutions, which are discussed in detail. Then three experts independently evaluate the solutions in points (from one to ten) according to the integral indicator - the effectiveness of recommendations for solving the problem described in the case. The points given by the experts are summed up for each solution. The one with the maximum final score wins.

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